prpri Analysis of Fourteenth Amendment to CGST Rule 2020 Analysis of Fourteenth Amendment to CGST Rule 2020

Fourteenth Amendment to CGST Rule, 2020

The CBIC has issued Notification 94/2020-Central Tax on 22.12.2020 whereby the CGST Rules, 2017 were further amended vide Fourteenth Amendment. This brings in many changes in provisions of GST Registration, Cancellation, Provisional ITC claim, GSTR-1 blocking, E-way bill validity, etc, which are briefly summarized below:

Aadhaar authentication for Registration (Substituted Rule 8(4A))

As per the new amendment, every application made under Rule (4) shall be followed by.

> Biometric based Aadhaar authentication and taking photograph, unless exempted under sub-section (6D) of section 25, if the applicant has opted for authentication of Aadhaar number; or

> Taking biometric information, photograph and verification of such other KYC documents, as notified, unless the applicant is exempted under sub­section (6D) of section 25, if he has opted not to get Aadhaar authentication done,

of the applicant where the applicant is an individual or of such individuals in relation to the applicant as notified under sub-section (6C) of section 25 where the applicant is not an individual.

Time limit increased for GST Registration (Amended Rule 9 (1))

The time limit for verification of registration application and issue of no-tice in Form GST REG-03 has been increased from 3 working days to 7 working days. Further, where the applicant does not undergo Aadhar Authentication or where the Department feels fit to carry out physical verification of places of business, time limit for grant of registration has been increased from 7 to 30 days.

New grounds for Cancellation of Registration (Amendd Rule 21)

(i) If ITC is availed in violation of Section 16 of the CGST Act, 2017 or rules made thereunder;

(ii) If outward tax liability declared in GSTR-3B is less-er than the outward tax liability declared in GSTR-1 for one or more tax periods;

(iii) If taxpayer violates newly inserted Rule 86B of the CGST Rules.

Suspension of Registration (Amended Rule 21A/ (2) Inserted sub rule (2A) and (3A))

Rule 21A (2) has been amended to provide that where registration is liable to be cancelled under section 29 or under rule 21, then registration may be suspended by proper officer pending proceeding for cancellation, without giving personal hearing.

After sub-rule (2), the following has been be inserted:

Rule 21A (2A): If significant anomalies are found between GSTR-3B and details of outward supplies furnished in GSTR-1 or details of inward supplies derived based on the details of outward supplies furnished by his suppliers in their GSTR-1, then his registration shall be suspended and the registered person shall be intimated in newly introduced Form GST REG 31 asking him to explain the anomalies and reasons why the registration should not be cancelled.

Rule 21A(34: No refund under Section 54 of the CGST Act during the period of suspension of registration.

Proviso to sub rule 4 provides that proper officer may revoke suspension of registration anytime during the pendency of the proceedings for cancellation.

Conditions for claiming ITC (Amended Rule 36(4)) Restriction of claim of ITC in respect of invoices/debit notes not furnished.

Blocking of GSTR-1 in case of non-filing of GSTR-3B (Inserted Sub Rule 59(5))

As per the new sub-rule, non-filing of GSTR-3B for preceding two months/preceding tax period will result in blocking of facility of filing FORM GSTR-1 or use invoice fur-nishing facility (IFS). Registered person restricted to use ITC to discharge his liability towards tax in ex-cess of 99% of such tax liability as per newly inserted Rule 86B cannot file GSTR-1 or use IFF, if he has not filed GSTR-3B for the preceding tax period.

Restricting use of ITC (Introduced new Rule 86B)

The newly introduced Rule 86B shall come into force from 1′ January 2021 wherein restriction has been placed on setting off more than 99% of tax liability from ITC where the value of taxable supplies other than exempt supply and zero-rated supply exceeds Rs. 50 lakhs in a month. Though few exceptions have been provided to this rule which are as follows:

(a) the said person or the proprietor or karta or the managing director or any of its two partners, whole-time Directors, Members of Managing Committee of Associations or Board of Trustees, as the case maybe, have paid more than one lakh rupees as in-come tax under the Income-tax Act, 1961(43 of 1961) in each of the last two financial years for which the time limit to file return of income under subsection (1) of section 139 of the said Act has expired; or

(b) the registered person has received a refund amount of more than one lakh rupees in the preceding financial year on account of unutilised input tax credit under clause (i) of first proviso of sub- section (3) of section 54; or

(c) the registered person has received a refund amount of more than one lakh rupees in the preceding financial year on account of unutilised input tax credit under clause (ii) of first proviso of sub- section (3) of section 54; or

(d) the registered person has discharged his liability towards output tax through the electronic cash ledger for an amount which is in excess of 1% of the total output tax liability, applied cumulatively, upto the said month in the current financial year; or

(e) the registered person is Government Department, Public Sector Undertaking, local authority; or a statutory body.

Increase in distance for transportation of goods in e-way bill (Amended Rule 138)

E-way bill will now be valid for 1 day for every 200 km of travel, as against 100 km earlier, in cases other than Over Dimensional Cargo or multi modal shipment in which at least one leg involves transport by ship. For every 200 km or part thereof thereafter, one additional day will be allowed.

Restriction on furnishing of information in FORM GST EWB-01 (Amended Rule138E)

Person whose registration has been suspended would also not be al-lowed to furnish the information in PART A of FORM GST EWB-01. If registered person other than a person paying tax under composition levy, has not furnished the returns for a consecutive period of two tax periods, then he shall not be allowed to furnish the information in PART A of FORM GST EWB-01.

Notice in FORM GST REG-31 (See Rule 214A)

A new form has been inserted namely FORM GST REG-31, for intimating suspension or notice for cancellation of registration.

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August 2021